Copease Mfg. Co. v. American Photocopy Equipment Co.

• Citation: 298 F.2d 772
• Decision Date: 23 February 1962
• Docket Number: No. 13295-6.,13295-6.
• Parties: COPEASE MANUFACTURING CO., Inc., a Delaware corporation, Plaintiff-Appellant and Cross-Appellee, v. AMERICAN PHOTOCOPY EQUIPMENT CO., a partnership; Samuel G. Rautbord, a partner; and American Photocopy Equipment Company, an Illinois corporation, Defendants-Appellees and Cross-Appellants. COPEASE MANUFACTURING CO., Inc., Plaintiff-Appellant and Cross-Appellee, v. PORAY, INC., an Illinois corporation, Defendant-Appellee and Cross-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

298 F.2d 772 (1961)

COPEASE MANUFACTURING CO., Inc., a Delaware corporation, Plaintiff-Appellant and Cross-Appellee, v. AMERICAN PHOTOCOPY EQUIPMENT CO., a partnership; Samuel G. Rautbord, a partner; and American Photocopy Equipment Company, an Illinois corporation, Defendants-Appellees and Cross-Appellants.

COPEASE MANUFACTURING CO., Inc., Plaintiff-Appellant and Cross-Appellee, v. PORAY, INC., an Illinois corporation, Defendant-Appellee and Cross-Appellant.

No. 13295-6.

United States Court of Appeals Seventh Circuit.

December 26, 1961.

Rehearing Denied February 23, 1962.

William C. Conner, Daniel L. Morris, Curtis, Morris & Safford, New York City; Edwin M. Luedeka, Soans, Anderson, Luedeka & Fitch; Charles M. Rush, Kirkland, Ellis, Hodson, Chafetz & Masters, all of Chicago, Ill. (Edward G. Curtis, Curtis, Morris & Safford, and Charles H. Tuttle, Breed, Abbott & Morgan, all of New York City on the briefs), for Copease Manufacturing Co., Inc.

Albert E. Jenner, Jr., Richard Russell Wolfe, John J. Crown, Chicago, Ill. (Thompson, Raymond, Mayer, Jenner & Bloomstein, Jarrett Ross Clark, Franklin M. Crouch, Wolfe, Hubbard, Voit & Osann, Chicago, Ill., of counsel), for defendants-appellees and cross-appellants.

Before DUFFY, SCHNACKENBERG and SWYGERT, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

From the parts of a judgment of the district court invalidating a patent, entered in two causes¹ consolidated for trial, Copease Manufacturing Co., Inc., a Delaware corporation, plaintiff, appealed in No. 13295, and from other parts of said judgment, defendants, American Photocopy Equipment Co., a partnership, Samuel G. Rautbord, a partner, American Photocopy Equipment Company, an Illinois corporation,² and Poray, Inc., an Illinois corporation, filed a cross-appeal in No. 13296.

The patent in suit, U.S. Patent No. 2,657,618, was issued November 3, 1953 to Dr. Walter Eisbein, on an application filed April 17, 1950, and was assigned to plaintiff November 16, 1954. The patented machine is intended for use in connection with an improved method of photocopying known as the diffusion-transfer-reversal process, herein called the "diffusion process". Like the old "wet process", the diffusion process involves exposure and developing steps. No claim to the development of the diffusion process is here involved. It was invented in 1939-1940 by either or both Dr. Edith Weyde of the German photographic firm I. G. Farbenindustrie Aktiengesellschaft, known as Agfa, and Dr. André Rott of the Belgian photographic firm Gevaert. Agfa filed a patent application on the process in Germany in 1941 and its first patent thereon was issued in Norway in 1943. Gevaert filed a patent application thereon in Great Britain in November 1939 and its first patent was issued in France on June 30, 1941.

The Eisbein patent states that it relates to "improvements in a device for developing photographic or photomechanical reproductions," and that the device is "primarily suited for carrying out a photo-mechanical reproduction process such as is described in French Patent No. 879,995". That process is Agfa's version of the diffusion process. It was publicly disclosed and demonstrated by Agfa at its plant in Leverkusen, West Germany in February, 1949. Eisbein did not hear of this process until that occasion.

From the findings of the district court³ it appears that the device of the Eisbein patent, as well as that of the accused machines, respectively, is apparatus designed for use in the development step of the diffusion process, which includes two steps: the exposure to light of the photosensitive emulsion on a "negative" sheet, and the development of the negative with transfer of the image to a "positive" sheet.⁴

Dr. Weyde's efforts, in her experimental work for Agfa in connection with the development-diffusion-transfer process, having proved unsatisfactory, Agfa made a machine designed to keep the positive and negative sheets under pressure throughout a substantial area at the same time. This machine included a large, rotatable drum and a group of endless belts which extended around a major portion of the periphery of the drum to squeeze the papers together over a large area as they passed between the drum and belts. The district court found that the machine was inappropriate for commercial production and general office use because of its large size, its large liquid capacity and frequent need for adjustment of the belts and rollers. Such adjustments were required because sheets sometimes tore, due to the lateral creepage of the belts along the supporting rollers.

According to Dr. Leubner, who was Dr. Weyde's superior, because of the commercial unsuitability of this machine and the belief that the process would never be profitable until an inexpensive, proficient and trouble-free machine, suitable for use by inexperienced office personnel, could be provided for performing the developing step, Agfa called a meeting of the members of the German Association of Manufacturers of Document Photocopying Equipment to be held at the Agfa plant in Leverkusen, Germany on February 23, 1949. This meeting was attended by fifteen or more persons, most of them manufacturers of photocopy equipment and representatives of this field.

At this meeting, Agfa scientists gave detailed information about the diffusion process and Dr. Weyde demonstrated the process, using the Agfa machine (in evidence as exhibit DX QQ). She also told the audience of her unsatisfactory experience in attempting to use rollers which press the positive and negative sheets together along a single line, and cautioned that, in order to avoid the formation of creases and wrinkles and insure good copies, the two sheets must be held together under pressure throughout a substantial area.

Four manufacturers agreed to undertake the design of a suitable developing machine. Trikop, later called Develop, represented by Dr. Eisbein, was a small newcomer in the industry, while the others were leading German manufacturers of photocopy equipment.

The district court found:

"Following the demonstration, the companies represented were invited to undertake the design and conception of a suitable commercial machine for performing the developing-transfer step of the diffusion-transfer-reversal process. Representatives of four manufacturers, including Dr. Eisbein, agreed to attempt to accomplish that object. May 1, 1949 was set as the deadline for the four companies to submit to AGFA their respective machine designs."

Approximately a week after the meeting at Leverkusen, Agfa wrote to each of the four companies which had agreed to undertake the design of a machine. This letter contained detailed information about the diffusion process and was accompanied by a blueprint of the Agfa machine. The third paragraph of the letter repeated the precaution which Dr. Weyde had expressed at the meeting.

On the train going home from the meeting in Leverkusen, Dr. Eisbein made the first tentative sketches of his machine design. Before the end of March, 1949, he had constructed a first model of the machine, within a few months had perfected its operation, and by the middle of June had successfully demonstrated an improved model of the machine to Agfa in Leverkusen. The Agfa executives found the Eisbein machine "absolutely excellent," although first they were "surprised" to find that Eisbein had disregarded the express warning which Agfa had given him concerning the necessity of pressing the sheets together over an area simultaneously and had used rollers which press the sheets together along substantially a single line. However, their exhaustive tests proved that the machine was "fool-proof".

Following this successful demonstration, Agfa called another special meeting of the Association of the Manufacturers of Photocopy Equipment to be held at Rudesheim, Germany on June 29, 1949. On that occasion, Dr. Eisbein demonstrated his machine to the entire Association. The enthusiasm with which this machine was received by the members of the Association is shown by the fact that, even though all of them were competitors of Dr. Eisbein's company, Trikop, in the manufacture of photocopying equipment, they gave Dr. Eisbein orders for "nearly a hundred" of his machines following the demonstration. Orders were received even from the other three companies who had themselves undertaken to design machines.

The district court found:

"None of the other three companies which had undertaken to design a machine ever submitted a machine design to AGFA."

Mr. Strattman of Fotokopist, who was called as a witness by defendants, admitted on cross-examination that his company had actually attempted to design a workable machine but had been unable to do so.

The Eisbein machine was first announced to the general public in October, 1949, and enjoyed immediate public acceptance.

The basic or independent claims of Eisbein U. S. patent 2,657,618 relate to a mechanical device having three primary parts: (1) a liquid-tight casing; (2) guides for guiding two or more sheets of emulsified photocopy paper into and through developer liquid in that casing; and (3) a pair of wringer-rollers located within that casing for squeezing the sheets of photocopy paper together after they have been moistened in their passage through the liquid.

In the diffusion process the coated side of a photosensitive, exposed negative sheet and the chemically coated side of a positive sheet of transfer paper are moistened with developing and solvent liquid, placed face to face and then pressed together. After the two sheets have passed through the wringer-rollers and are pressed together they stick one to the other. When pulled apart, some 10 to 40 seconds later, the negative sheet has a developed negative image and a positive image has formed on the positive transfer sheet by chemical action.

When the device of the Eisbein patent is used with this process the negative and positive...